Tanker captains earn $100,000 a month for Hormuz transits

Investing.com -- Oil tanker captains traveling through the Strait of Hormuz now receive monthly compensation of $100,000, plus a $50,000 bonus for each passage, as Iranian attacks on vessels increase.

Shipowners are offering the elevated danger pay to convince seafarers to remain on vessels as Gulf nations work to maintain crude oil flows through the waterway, according to three people familiar with tanker owners and crew speaking with the Financial Times.

Standard sailors, who normally earn as little as $1,500 monthly, and captains, whose regular pay is about $15,000 per month, receive double wages while operating in the southern Red Sea and Gulf of Oman.

Pay increases further during each Hormuz transit, with regular sailors receiving at least four to six times their normal rates.

Many trips through the strait are made by dedicated tankers on regular shuttle runs, allowing sailors to earn higher rates for months while facing constant risk of Iranian missile and drone attacks.

Among seafarers, those making the voyage are "almost being viewed as mercenaries," said one source, reflecting the danger of sailing through the strait. Ships using the waterway face one of the heaviest periods of assaults since the U.S. and Israeli attacks on Iran triggered the war in February.

At least 14 attacks occurred since September 20, according to maritime security company Vanguard, including four vessels struck since Saturday.

Freight rates for cargoes moving through the contested waterway reached a record $1.3 million per day this week, compared with about $20,000 to $50,000 daily last year.

Sailing into the Gulf, loading and returning typically takes around four days. Only a handful of ships are willing to make the voyage, shuttling oil to other tankers waiting off Fujairah in the Gulf of Oman for final delivery.

A typical supertanker carries around 2 million barrels of oil and sails with a crew of up to 35 seafarers.

Manoj Yadav, secretary-general of the Forward Seamen's Union of India, said owners are either offering large pay packages to seafarers or pressuring unwilling crew to sail by saying they will be replaced if they refuse, with repatriation costs taken from their wages.

At least 93 ships have been hit since February 28 and 24 sailors have been killed, according to the International Maritime Organization.

"The reality is that these ships and our seafarers are targets . . . It's shameful but it is also a new reality and it is making the lives of those we rely on very, very difficult," Scott Bergeron, executive director of cargo shipping company Oldendorff Carriers, told a UK shipping conference on Tuesday.

Most ships travel through Hormuz at night with their GPS signaling equipment off. The U.S. Navy has deployed defensive air capabilities to cover ships sailing through the strait via a route close to the Omani coast.

Maritime analyst Windward estimated that 13 vessels traveled through the strait on October 4, down from 24 on the same day last week following the increased strikes.

Windward figures show that around 2% of ships that sailed through Hormuz in the third quarter were hit.

Before the conflict, about 135 vessels sailed through the strait each day carrying around a fifth of the world's supply of oil and liquefied natural gas.

Oil flows through Hormuz remain around a third below prewar levels, Kpler said on Tuesday. Some previous flows have been shifted to other routes, such as pipelines.

Tanker owners are paying war-risk insurance of between 6% and 10% of the value of the ship's hull to operate in the region, according to insurance brokers.

This means a supertanker could pay up to $20 million in war insurance for the voyage into the Gulf.

Ship fuel prices reached fresh highs last week. The price of fuel oil typically used by supertankers in Fujairah, the nearest refueling port to the Gulf, was $686 per tonne on Monday, up 67% from the same time last year.

Most seafarers come from poorer communities in countries such as the Philippines, India and Indonesia, as well as Russia, Ukraine and eastern Europe.

"Seafarers are losing from everywhere. If they won't agree, they may lose their job. If they agree, they may lose their life," Yadav said.

Companies sending ships through the strait include South Korean company Sinokor and Greek company Dynacom, as well as Middle Eastern state companies including Abu Dhabi's state-owned oil and gas company Adnoc and Kuwait Oil Tanker Company.

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